How is Commodity Trading Margin Calculated? Commodity Trading Margin is equal to Used Commodities Trading Margin added to Free Commodities Trading Margin
Commodity Trading Margin = Used Commodities Trading Margin + Free Commodities Trading Margin
What's Used Commodities Margin? : amount of money in your account which has already been used up when buying a commodity lot, this contract is one that is displayed in open trades. As a trader you can not use this amount of money after opening a trade order transaction because you have already used it and it isn't available to you.
In other words, because your commodity broker has opened up a position for you using capital you've borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this commodity leverage he has given you.
What is Free Commodities Margin? : amount in your trading account which you can use to open new trade positions. This is amount of money in your trading account that has not yet been commodity leveraged because you've not yet opened a trade with this money - this is also very important for you as a trader because it enables you to continue holding your open trade transactions as explained and illustrated below.
Example of How is Commodity Trading Margin Calculated in MT4?
The commodity margin example on MT4 commodity trading Software below, the set commodities leverage ratio is 100:1, the commodity margin is equal to commodity trading used margin plus commodity trading free margin.
Commodity Trading Margin is equal to Used Commodities Trading Margin + Free Commodities Trading Margin
Commodity Trading Margin - $16,116.55
Commodity Trading Margin is equal to Used Commodities Trading Margin + Free Commodities Trading Margin
$16,116.55 = $2683.07 + $13,433.48
$2683.07
Commodity Trading Margin used to open trades in MetaTrader 4 platform example above
$13,433.48
Free Commodity Margin that can be used to open new commodities trades in MetaTrader 4 platform example above.
Commodity Trading Margin is equal to Used Commodities Trading Margin + Free Commodities Trading Margin
To Learn More about Commodity Leverage and Margin - How Do You Read the Topics Below:
Commodities Leverage & Margin Tutorial
